NORTHAMPTON, Mass. (WWLP) – Investigators have busted a massive insurance fraud ring operating both in Massachusetts and in New York City.
The Hampshire and Franklin Grand Juries returned 289 indictments Wednesday against 38 individuals. Nine of those people will be arraigned this Friday in Franklin Superior Court.
Northwestern District Attorney Spokeswoman Mary Carey told 22News those nine individuals are charged with insurance fraud, perjury and conspiracy.
The scheme is alleged to involve individuals primarily New York who insured and registered vehicles in Massachusetts by claiming to live at false or non-existent residential addresses in Northampton, Easthampton and Greenfield.
During the six years in which this scheme is alleged to have operated, hundreds of thousands of dollars in premium avoidance is alleged to have occurred.
Below is the entire statement sent to 22News from Northwestern District Attorney Spokeswoman Mary Carey regarding this case:
The Hampshire and Franklin Grand Juries have returned indictments against 38 individuals allegedly involved in an insurance fraud ring operating both locally and in the metropolitan New York City area. Nine of the indicted individuals are scheduled for arraignment on insurance fraud, perjury and conspiracy charges this Friday, August 22, 2014 at 2 p.m. in the Franklin Superior Court, located at 101 Munson Street in Greenfield.
The indictments follow a year-long collaborative investigation by the Insurance Fraud Bureau (IFB) of Massachusetts, the Northwestern District Attorney’s Office, the Massachusetts State Police, and the Department of Homeland Security. The IFB, a public-private investigative agency dedicated to the systematic elimination of fraudulent insurance transactions, notified the Northwestern District Attorney’s Office of the alleged insurance fraud scheme in 2013. The scheme is alleged to involve individuals primarily from the metropolitan New York City area who insured and registered vehicles in Massachusetts by claiming to live at false or non-existent residential addresses in Northampton, Easthampton and Greenfield. By doing so, the involved individuals are alleged to have paid substantially lower premiums than they otherwise would have had they reported their true residential addresses in and around New York City. During the six years during which this scheme is alleged to have operated, hundreds of thousands of dollars in premium avoidance is alleged to have occurred.
“These indictments are the by-product of the Northwestern District Attorney’s Office’s ongoing partnership with the Insurance Fraud Bureau, through which we continually strive to detect, investigate and prosecute those who cheat the system and raise insurance costs for all of us,” said District Attorney David E. Sullivan.
The Hampshire and Franklin Grand Juries returned a total of 289 indictments against the 38 individuals involved. One hundred thirty-eight of the indictments are against Lefen “Helen” Chen, 55, of Flushing, New York, who is alleged to have orchestrated the scheme by accompanying the other involved individuals to insurance agencies and assisting them with the fraudulent insurance applications. Chen and eight other indicted individuals were arrested in New York on August 12-13, 2014, and subsequently waived extradition back to Massachusetts. The arrests were executed with the assistance of the New York Police Department, the Massachusetts State Police, the Department of Homeland Security, and the Queens District Attorney’s Office.
Authorized by an Act of the Massachusetts Legislature and signed into law in 1990, the IFB conducts criminal investigations and refers appropriate cases for criminal prosecution. It is funded by automobile and workers compensation insurers in Massachusetts.
IFB and The NWDA have worked to reduce insurance fraud in the Northwestern district of Hampshire and Franklin Counties and the town of Athol.